Inventing benefits from regulations reducing farmers’ use of water

An article by the excellent rural reporter Sue Neales, examined the sales and purchases of irrigation water rights for agriculture in the Murray-Darling Basin (agriculture uses about 90 per cent of water collected in dams for industry and personal consumption). The focus of the article was on the overseas purchasers of the water rights, the prices of which have risen strongly – high security rights now trade at $3000 per megalitre, more than tenfold the price 15 years ago.

Reasons for this increase include enhanced agricultural demand from overseas, but the most significant cause has been the curtailment of water supply for agricultural use and its diversion to a panoply of environmental uses.  The policies (and John Howard started the ball rolling) are taking 2,750 gigalitres per annum from the region (out of 7,000 gigalitres “high security” and 10,000 gigalitres in total of water available) from productive agriculture to uses designated as “environmental”.

These diversions from productive use started with claims about salinity, which were driven by the ACF and WWF and supported by their spokespeople in the government owned media showing pictures of salt-infused farmland.  The facts are that only 0.4 per cent of farmland showed any signs of salinity and almost all of this was due to natural salt outcrops.

The initial production-suppressing measures were built upon during the millennial drought under which we were supposedly to see the entire Murray system drying up.  In addition to salinity being proved to be a hoax, rainfall is, of course, unchanged from that observed over the past 200 years.

But why let facts waste a good crisis?

Farmers responded to scare campaigns fomented by activist groups by looking for compromises little realising that for their opponents each concession was only a staging post for the next claim.  Hence the momentum is developed, institutions are in place and rolling back the regulatory tide becomes extremely difficult.  And it goes without saying that nobody brings the scaremongers (including Garnaut and Flannery) to account or ridicules the politicians (led by Tony Burke) for their gullibility.

One institutional reason why the regulatory momentum cannot be wound back is the changed nature of the agricultural bureaucracy.  Over the past two decades Primary Industry Departments have been transformed from ones that aggressively lobbied for favours to farmers (fertiliser subsidies, drought relief etc) into agencies which wish to constrain output by regulatory restraints including reducing the producers’ use of environmental resources.  They have become the accomplices of the green activists.

In Sue Neales’ piece Commonwealth Water Minister Ann Ruston is quoted as saying, “the return of profitability to the citrus and table grape industry and the boom in ­almond investment is testament to the benefits of placing a real value on Murray irrigation.”

What does that mean?  The Murray region, which dominates Australian irrigated agriculture, has always seen water traded and therefore a real price on water.

The higher cost of water has certainly expedited water conservation measures as farmers invest in capital to avoid water usage.  But many such expenditures are made viable only because of the artificially enhanced costs of water that stem from the policies of restraining its productive use.  As such they have negative benefits.

It is, however, typical that politicians, under the influence of their environmentalist departments, should see merit in policies that have reduced real income levels.  It’s almost like seeing advantages in forcing the greater efficiency of the alimentary canal in processing a food supply that has been halved or, to use a more topical example, seeing benefits in economy of energy usage from taxing coal and gas!

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28 Responses to Inventing benefits from regulations reducing farmers’ use of water

  1. Jo Smyth

    How easy it is these days to convince the indoctrinated and gullible.

  2. We should deduct the the value of evaporation from Lake Alexandrina from the GST WA & NSW hand over.

  3. nilk

    The focus of the article was on the overseas purchasers of the water rights, the prices of which have risen strongly – high security rights now trade at $3000 per megalitre, more than tenfold the price 15 years ago.

    Okay, I’m happy to cop to being an ignoramus on this subject, but what are “overseas purchasers” of water rights? Who are they and what do they gain?

  4. DaveR

    Eerie parallels with the renewable energy debate:

    ” But many such (investments) are made viable only because of the artificially enhanced costs of water (power) that stem from the policies of restraining its productive use (increasing costs by adding arbitrary taxes). As such they have negative benefits.

  5. Dianeh

    Not sure if link will work on the iPad.

    Cubbie uses huge amounts of water affecting all downstream in the Darling river. Allocations, usage and ownership are all included in the link.

    Between the huge water diversion by Cubbie and others, and the environmental flows, is it any wonder the Darling is dry in places and the Anabranch was cut off from the river system. Both the allocation policy and the environmental flows are despicable.

  6. Dianeh

    Link not even there.

    https://timalderman.com/2017/03/01/cubbie-station-water-allocation-abuse/

    You will need to cut and paste if you want to read about Cubbie. But there is loads of information around. They store more water than many of our irrigation areas are even allocated. Huge amounts of water. Foreign owned.

  7. I agree the original water grabs (could opine water piracy) in the 1990’s that made Cubbie what it is now succeeded because of supine State Govt processes and sleepy Feds too lazy or dumb to act.
    On another subject most environmental flows are just a facet of the general green attacks on dams.

  8. Rayvic

    “Over the past two decades Primary Industry Departments have been transformed from ones that aggressively lobbied for favours to farmers (fertiliser subsidies, drought relief etc) into agencies who wish to constrain output by regulatory restraints including reducing its use of environmental resources. They have become the accomplices of the green activists.”

    Sadly, another major example of the negative benefits of adopting politically correct culture.

    And there’s more. Energy departments similarly have been seduced into converting Australia from the cheapest supplier of electricity to the developed-world’s most expensive by phasing out coal-fired generation. Consequently, many manufacturers will close down and/or move offshore.

  9. 132andBush

    nilk,

    “Overseas purchasers” is a reference to overseas investors/owners of agricultural land.
    Mostly superannuation schemes, they seem to have a bottomless bucket of money and can outbid most of us natives.

  10. 132andBush

    And there’s more. Energy departments similarly have been seduced into converting Australia from the cheapest supplier of electricity to the developed-world’s most expensive by phasing out coal-fired generation. Consequently, many manufacturers will close down and/or move offshore.

    Yeah, one gets the feeling Australia is the test case for all this shit.

  11. Tel

    In Australia, we have something that money cannot buy.

    Oh? What would that be?

    That is poverty, sir!

  12. egg_

    one gets the feeling Australia is the test case for all this shit.

    Like Spain?
    Don’t these idiots ever learn?

  13. feelthebern

    Which water rights are being bought by foreigners?
    Temporary rights?
    Medium security rights?
    High security water rights ?
    & of the high security water rights, where these sold willingly by the land title owners?
    Also, considering all land title holders have at least some high security water licences, unless they sold them or they purchased the land as “dry land” with out high security water licences (which meant they paid a fraction per acre versus land with high security water licences).

  14. feelthebern

    It’s pretty simple.
    If you have “dry land” sell it to a neighbour with water.
    They will get the highest return from it.
    Therefore will most likely offer you the best price.
    If you weren’t an idiot & sold your high security water licences, sell your property with water the water rights as prices are through the roof.
    If you needed to buy water licences of any nature, 2016 was the year to do it as it was one of the wettest years on record, and water rights prices were subdued at every security level.

  15. feelthebern

    Putting a price on water has given certainty over the regime.
    Which last time I looked, is one of the primary drivers of investment (overseas & domestic).
    Farmers & graziers should be cheering the water regime.

  16. W Hogg

    Which water rights are being bought by foreigners?
    Temporary rights?
    Medium security rights?
    High security water rights ?
    & of the high security water rights, where these sold willingly by the land title owners?

    All and yes. They trade surprisingly actively and visibly although you probably wouldn’t day trade them. The typical O/S investor is the US mega pensions etc.

  17. 132andBush

    Which water rights are being bought by foreigners?
    Temporary rights?
    Medium security rights?
    High security water rights ?

    I’d say all three, although mostly the high and general security.

  18. manalive

    Farmers responded to scare campaigns fomented by activist groups by looking for compromises little realising that for their opponents each concession was only a staging post for the next claim …

    The ratchet metaphor is perfect: “… allowing motion in one direction only …”.
    The BoM site shows the M-D Basin annual rainfall be be highly variable (like AUS as a whole) but the trend since 1900 is positive (the base is ~250mm).

  19. John Constantine

    Weekly times reports yarragrad Nazgul to attack river grazing licences.

    Currently 9000 grazing licences on 17000 kilometers of riverfront.

    The green aim is to have zero.

    Every campaign to cut productive use of some country under some pretext is just followed by the next one.

    Confiscation without compensation.

    Comrades.

    ( The farmers will still have to control the States weeds and vermin on the confiscated ground, and fight the fires on the unmanageable fuel burden.)

    The left are just fuckers.

  20. Turtle of WA

    Jim Taggart from Atlas Shrugged is the model for all these greenies with jobs in oil companies and farmer groups.

  21. Entropy

    Dianeh
    #2606339, posted on January 10, 2018 at 1:04 pm
    Link not even there.

    https://timalderman.com/2017/03/01/cubbie-station-water-allocation-abuse/

    You will need to cut and paste if you want to read about Cubbie. But there is loads of information around. They store more water than many of our irrigation areas are even allocated. Huge amounts of water. Foreign owned.

    That’s not a fair assessment. Queensland is a thimble of the total volume of MDB water to start with. About 20% max of just the Darling system which itself is about the same for the MDB. So a fifth of a fifth. Cubbie itself is about 2% of Qld zmDB basin water. It’s between the Narran and the Culgoa. The culgoa flows in to the Darling and cubbie doesn’t take much from that, and even then only in flood. Most of its take is overland flow which otherwise terminates across the border in the Narran Lakes. Cubbie water, if it wasn’t taken, almost never gets into the Darling system anyway. Of course, a Narran lakes cattle producer would want to maximise overland flow on their pastures, and Cubbie does take some of that. Probably makes at least a few inches difference in total depth of inundation in the Narran Lakes pastures.

    So I suggest you don’t waste your time looking in that direction for the Other Person To Blame. If you must, blame the earnest young policy officers in NFF and the various industry organisations who foolishly think they can negotiate with the crocodiles in environmental orgs. As Alan says, those ideologues will just take the compromise, then immediately ratchet up for the next negotiation. That’s what they do. Ultimately they can’t be reasoned with, they can’t be bargained with, they will never stop. Death by a thousand cuts.

  22. Entropy

    Turtle, these industry org policy jump ties are Taggets. They are just useful idiots.

  23. Entropy

    Sorry, should have spell checked that:
    Turtle, these industry org policy numpties aren’t Taggets. They are just useful idiots.

  24. A blight on national water policy has oozed out of WA from the 90’s rooted in WA Govts refusal to manage Perth catchments bush in fear of green backlash at the ballot box. This has lead to weird propaganda against rain and inflows with the loss of ~$1Bn worth of water and over investment in their seawater desal which has caused a flood of bad policy eastwards influencing a colossal disaster of multi-eastern-State climate-change influenced over-investment in near useless desal plants for Eastern capitals to the tune of maybe $20Bn. This glaring policy disaster was also driven in general by the Wentworth Group green water policy memes backed by bodies like the Water Association a grouping of utilities who all saw a bountiful future in what I term “the movement towards more expensive water”. Around Sydney and Melbourne the Greens driven expansion of National Parks has sabotaged options for expanded dam sites. Environmental flows are so mad that the Thomson dam often loses 35% of inflows. Warragamba has even been sabotaged by Govt stopping the transfer from Tallowa on Shoalhaven preferring to waste that water to the sea in hope Warragamba levels fall below the trigger to start the Kurnell desal plant. It must p off the greenwatercrats that rain has kept Warragamba above the 80% level.
    Dams that could seed northern development are seldom on the policy landscape due to green, indigenous and general public-service-dyed-in-wool-green-dogma barriers.

  25. Michael Madden

    I’m pretty sure that Malcolm fucking Turnbull was the environment minister when $10
    Billion to send once productive water down the river and out to sea.
    Who the hell would spend that amount of money to reduce GDP and people’s incomes?

  26. Lady Nilk, Iron Bogan

    Thanks, 132andBush. That clears it up.

  27. W Hogg

    I’m pretty sure that Malcolm fucking Turnbull was the environment minister when $10
    Billion to send once productive water down the river and out to sea.
    Who the hell would spend that amount of money to reduce GDP and people’s incomes?

    Don’t know how the river managed to survive before St Malcolm. For over a century, people farmed without the benefit of hedge funds trading High Security water rights.

    Today, we have the Greens screeching for water to be taken off them because River. In fact, if you want to see actual mental illness in full flow, ignore Arky and follow Sarah Sea Patrol’s Twitter.

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